Hero MotoCorp has been quite popular in the country and global two wheeler market as India's largest two wheeler maker. Post split with Honda, the two strong brand have been strong competitors in the domestic market. As per sources, Hero MotoCorp is likely to gain financial benefit as its competitors continue to face issues like production capacity constraints and slowing volumes.
Even though the Indian automobile industry has been affected with issues relating to sales, the two-wheeler segment has been positive for increase in sales in the motorcycle and scooter segment. Recently signs of improvement have been witnessed. As per a recent report released by (SIAM) Society of Indian Automobile Manufacturers, two wheeler sales volumes have grown by 15% during April-August 2014, backed by 31% from scooter and 9% from motorcycle segment.
As per reports released by analysts from Kotak Institutional Equities Research, the analysts stated, “We reckon improved economic growth, decline in cost of ownership (lower fuel prices) and an enhanced distribution network by manufacturers will spur growth in the two-wheeler industry.”
Currently Honda Motorcycle and Scooter India (HMSI) has a backlog of about 65,000 scooters. Given the lag in production output, buyers may opt for vehicles from Hero MotoCorp. The Kotak report also states that, “We expect Hero to enhance market share in domestic motorcycle segment by 280 bps over 2014-16 and Honda to lose 160 bps market share.” Both the companies Hero MotoCorp and Honda has been working on expanding the production capacity from their respective plants Gujarat.
Source: IT
